Gold falls as strong dollar encourages investors to sell

LONDON: Gold today fell, paring a first weekly gain in seven, as a stronger dollar curbed demand for an alternative investment and spurred some investors to sell the metal.

Gold slid 0.4 per cent to $ 1,669.16 an ounce. Prices yesterday touched $ 1,678.81, the highest level since January 3. Silver declined 0.2 per cent to $ 30.785 an ounce, a third weekly advance and longest period of gains since September.

The US Dollar Index, a measure against six currencies, rose for a third session in four. Gold usually moves inversely to the greenback.

The yen reached the lowest level since June 2010 against the dollar as Japan's government pledged $ 116 billion in spending to drive a rebound.

Bullion is 0.8 per cent higher this week, set to end the worst run of weekly losses since 2004 as signs of increased demand in China outweighed concern that an end to stimulus in the US this year will bolster the dollar.